Analysts remain bearish on liquor companies despite Q1 volume gains

Raw material pressures and lack of pricing power key reasons for this view

The June quarter performance of alcoholic beverage makers was a mixed bag, with revenues above expectations while margin performance was sub-par. On a low base, the combined revenue growth of United Breweries, Radico Khaitan and United Spirits--three of the largest listed players in this sector--was 61 per cent.

Higher sales were driven by strong volumes. Growth on this front was led by United Breweries, which reported a 121 per cent uptick over the year-ago quarter, followed by United Spirits (up 25 per cent) and Radico Khaitan’s 14 per cent.

Citing the reasons for the volume offtake, Nirmal Bang Research says